We live in a world where data is abundant. In staffing, we can pull a whole variety of reports, review dashboards, and run about any analytics we can think of. Unfortunately, access to all this information can also work against us—resulting in analysis paralysis, focusing on the wrong metrics, or losing focus on the key performance indicators (KPIs) that really matter with too many data points.
Thankfully, there are a handful of proven metrics that I have found that create a clear “path to success.” These are the true KPIs that not only show if you are currently achieving your goals, but also if you are on the right track to future success. Regardless of the staffing vertical you are in, the KPIs are essentially the same (with one possible exception we’ll talk about in a minute). Let’s look at each one, and how they can lead you down that path to success.
Candidate Conversations
Notice how this metric is not candidate interviews. Bringing new candidates in and evaluating their placeability is obviously an important activity, but it is no more important than reactivating a candidate in our database or redeploying an employee that is wrapping up an assignment. In fact, I would argue that the latter two are actually more important than constantly focusing on new applicant interviews. Regardless, I have found that focusing on candidate conversations has a much greater correlation to success than just interviewing new applicants.
I define a candidate conversation as a direct outreach that only a recruiter can do. This includes applicant interviews but also includes phone calls to applicants in the database or employees on assignment. What I do not include are emails and texts, as those tasks can be performed by anyone—or even handled by an AI agent or automation tool. I’m not suggesting that there is no value in texting or emailing, or that recruiters shouldn’t use these communication methods. However, data continues to show, without a doubt, that there is little to no correlation between texting or emailing and gross profit, while there is a very high correlation to personal interaction with candidates such as phone and video calls and in-person interviews and conversations.
Client Submissions and Interviews
The next two metrics go hand-in-hand. Theoretically, the more submissions you make to clients, the more interviews you’ll get. Of course, not all clients require submissions or interviews—particularly in the light industrial vertical. But if you have clients that do require one or both steps, submissions and interviews are critical metrics that show how efficient and effective your recruiting and candidate matching efforts are.
New Starts
Many staffing firms track placements, which is a valuable metric in itself. However, new starts is actually a more predictive KPI than placements. A lot can happen between a placement and a start, and, depending on your no-show and cancellation rates, placements are typically a less-reliable metric than new starts when correlating to gross profit. That being said, tracking your placements to new starts ratio can be a great tool for identifying issues with your placement process.
Gross Profit/Margin
Our industry tends to use gross profit and gross margin interchangeably (although some companies use both terms to describe different financial measurements). Regardless of the term you use, this is the amount of profit you have after you’ve paid the employees, taxes, and other direct costs. This profit is what allows the company to keep the lights on and pay for fairly important stuff like salaries, rent, recruiting technology, etc. It is ultimately the reason why there are recruiters—to place talent in positions that generate profit. Therefore, it is the final KPI that we measure.
Your Custom Path to Success
These five metrics create a clear, predictive path to success. Candidate conversations result in client submissions. Client submissions result in client interviews. Client interviews result in new starts, and new starts generate gross profit.
The great thing about focusing on these KPIs is that you can create individualized success paths for each recruiter, rather than coming up with generic goals for everyone. For instance, you may have one recruiter who needs 14 candidate conversations, on average, to get one client submission, but another recruiter who only needs 9. In this case, having a general candidate conversation goal based on 10 per submittal would help the second recruiter meet their goals, but the first recruiter would still fall short. Tracking these ratios also provides insight into possible bottlenecks and training areas for recruiters to help them be more efficient and successful.
Focusing on these five metrics is the closest thing I’ve found to a “silver bullet” in recruiting, and it’s a clear roadmap to guide you on your path to success.
is president of Tallann Resources, a national consulting and training firm specializing in the staffing and recruiting industry. As a consultant, trainer, and speaker, Erb has helped hundreds of companies create and execute sales and recruiting strategies to grow their business. He is the author of Winning the Staffing Sales Game: The Definitive Game Plan for Sales Success in the Staffing Industry. Learn more at tallannresources.com. Follow him on X @TomErb_Tallann.
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